A Study on Financial Literacy among

Indian Women

Abstract: The central theme of this study elaborates on the financial literacy of the women in the

financial sector of Udaipur. The main purpose of the paper is to enhance better and impactful

understanding of the subject so as the economy as a whole can attain the benefits in the growth

prospects. Apart from that, to know the financial literacy level of women, we constructed a

questionnaire and circulated among the working women in the city of Udaipur so as to assort

relevant and appropriate data. On the basis of the reactions, we found out that the financial literacy

level of women is based on their financial knowledge, attitude and behaviour. The outcome shows

that the general alertness in relation to the techniques and planning tools related to the finance

among women are in the current scenario is still not satisfactory. The study has also addressed

various aspects that are crucial and significant that is also related to the financial concept, financial

products, and services etc. In addition, the paper has grasped the knowledge that is required to be

attained by the women in order to make suitable planning for long period of time.

Overview - With the changing scenario the significance of literacy in the financial sector has

attained a good and successful position in the entire world. In addition to bring a strong economy

with proper and keen focus on the development of the suitable strategy on national level so as to

enable the economy of Indian market to stand at a magnificent position. The changing scenario in

the work patterns has provided greater significance to the subject of financial literacy and education.

As such in the most important assets in this regard is the involvement of women. This can be a very

important aspect that can contribute to a great extent in making optimum use of the resources and

the tools so as to reach to the best potential in financial terms

Concept Of Financial Literacy - The notion of the financial literacy is very wide and includes the

following parameters such as knowledge, behaviour and attitude in relation to the financial terms.

The basic meaning of the financial literacy is linked with the capacity of the knowledge and

understanding of financial products and also the risk and the returns associated with it therein.

According to OECD defines “Financial Literacy as a combination of financial awareness, knowledge,

skills, attitude and behaviour necessary to make sound financial decisions and ultimately achieve

individual financial wellbeing. People achieve financial literacy through a process of financial

education”.

Research Objective - To examine the level of working women in Udaipur in basic banking knowledge

& fundamentals of financial concept.

 To analyze the awareness of women in financial products and services.

 To study the need of women in making a wise judgment in relation to their saving and Investment

activities.

 To study the acquaintance of capital markets and government schemes with various budgeting

habits

Scope of the Research - The research work provides a deep and impactful understanding of the

subject related to the fiscal learning among women of Udaipur. Thus the study provides a broad

scope in relation to the subject covering all essential elements such as financial knowledge, financial

behaviour and financial attitude of women.

Methodology Of The Study –

Sampling Unit- Working Women of Udaipur City

Sampling Size – Since the scope of the study depends on some limitation like Budget, Time, and

Information. Around 150 respondents have been measured to make the study effective.
Review Of Literature – Indian has emerged as one of the least financially literate among 28

countries. Indians were ranked low for several reasons, including the lack of household budgets,

money management discussions with family, financial education or an understanding of money

management basics.

Indian families discuss money matters including budgeting, saving and responsible spending habits

with their children just 10 days per year. 43% women and 20% men said they did not understand

personal money management well enough to discuss the subject with their children.

Financial literacy means possessing the ability to understand how money is earned, saved and

invested. It entails having eased while dealing with numbers. A financially literate person knows the

importance of diversifying risk, compound interest, and inflation.

A lack of understanding of these makes one financially illiterate. A financially literate person

becomes easily vulnerable to frauds and scams.

Even on gender counts, Indians surpass the global averages. 80% of Indian women were financially

illiterate as compared to only 65% women worldwide. Similarly, 73% of Indian men were financially

illiterate compared to only 70% worldwide. The following problems can be attributed to financial

illiteracy

Falling prey to Ponzi schemes - These are collective investment schemes which promise to give sky-

high returns in a short span of time. It pays returns to existing investors out of money collected from

new investors instead of paying out of profits. The Saradha Chit Fund Scam, Sahara Scam, etc. are

classic examples. In India, these schemes have managed to collect more than Rs. 66,895K of

investments by duping millions of investors. Financial illiteracy and greed make individuals put whole

life savings in these schemes.

Choosing wrong products - Due to financial illiteracy, individuals ignore the risk-return-liquidity

aspect while investing. Most of the times they succumb to coercion from friends or family or to fulfill
immediate tax-saving needs. As a result, they digress from personal financial planning goals.

Ultimately, the money gets blocked in unproductive investments.

Lack of clarity between Saving, Investment & Insurance - Financially illiterate people can’t

differentiate between saving, investment & insurance. They get fooled by the marketing gimmicks of

agents. They buy insurance with an investment and fail in both aspects. Neither they get reasonable

ROI nor do they get sufficient risk cover.

Low participation in structured financial products like Mutual Funds - India has one of the highest

Gross Domestic Savings rates at 28% of GDP but one of the lowest mutual fund (MF) penetration

levels at only 6% of GDP. Mutual funds give investors manifold advantages. Financial illiteracy

prevents people from getting into mutual funds. Hence, they are unable to get returns

corresponding to their risk profile.

Analysis And Findings - During the research work following set of questions was asked from the

working women belonging to the Udaipur city. These questions were asked from around 150

respondents out of which 100 replied accurately and accordingly only responses of 100 respondents

were taken for analysis and interpretation.